Vietnam holds investment forum

ME - The demand stimulating capital will amount up to US$8 billion, addressed prime minister Nguyen Tan Dung at Vietnam Global Investment Forum networked online from Hong Kong to Vietnam, London, Geneva, Tokyo.

This special forum was held by Credit Suisse Bank, Hong Kong Trade Development Council and Vietnam Chamber for Commerce and Industry (VCCI) on April 20. The forum was closely watched by some 5,000 investors across the world.

In the prime minister's speech, Nguyen Tan Dung said that the world's financial crisis is impacting all countries, and Vietnam is no exception. Such sectors that are strongly hit by the world's financial crisis are export, tourism, employment. Thus, Vietnam has taken comprehensive measures to promote export, stimulate demand, apply proper monetary policies and target an economic growth rate of 5-5.5% this year. Dung confirmed that the economic growth of 5-5.5% is absolutely appropriate and feasible. This figure is similar to the forecasts of WB, International Monetary Fund (IMF) and Asian Development Bank (ADB).

Regarding the government's demand stimulating package, the prime minister said that the country's policy is to promote the capacity of capital access, gradually reduce lending interest rates. Vietnam has concentrated into helping businesses, particularly small and medium enterprises (SMEs), survive, reform technologies.

Vietnam has also focused on investing into rural areas, helping jobless people. Thus, the country's economy in the first quarter still has many positive signs. Namely, GDP in the first three months rose by 3.1% against last year, export increased by 2.4%, trade and payment balanced and reported a trade surplus.

Especially, forex reserve was secured and inflation was reined. Dung said that although foreign direct investment into Vietnam reduced in the first three months, FDI still posted at US$6 billion.

The prime minister called on investors to continue investing in Vietnam and he also committed that the country will better satisfy requirements on infrastructure and business environment.

After the prime minister's speech, many investors from different countries further questioned him about Vietnam's economic issues.
Thomas R. Siebert, chair of American Chamber for Commerce and Industry (AmCham) in HCM City: What is your comment on Vietnam's shortage of US dollars and will the SBV deal with this?
In the first quarter, Vietnam reported trade surplus of some US$1.7 billion. The balance of payments is being well maintained. Regarding Vietnam's shortage of foreign currency, I confirmed that Vietnam's current forex reserve is being maintained at a safe level. Our foreign currency can meet demand of 20 weeks of import. Therefore, I can affirm that Vietnam meets no difficulty in its US dollar source. Vietnam's foreign currency payment capacity is now safe and better than previously. There is nothing to worry about.

A representative from Credit Suisse Bank in Singapore: how will the current demand stimulating policies that are primarily developed by the state impact equitisation and promote development of state-owned enterprises (SOEs)?

Vietnam has 12,000 SOEs. We have been restructuring and equitising those SOEs. The country will maintain only some 1,500 SOEs, mainly corporations, in order to ensure the macro-economic stability. In 2008, the equitisation plan was delayed because the stock market negatively changed, which made many SOEs not want to list shares. However, in march, many SOEs registered for equitisation, listing on the stock market. Vietnam's government encourages this process.

Investors from Tokyo: When will Vietnam's inflation return to one digit?

The consumer price index (CPI) in Vietnam in March inched up by only 1.32% against last December. As our forecasts, the country's inflation this year will end up some 6%. We believe this target may be realised.

Investors from London: How does Vietnam plan to raise capital domestically and internationally?

Vietnam's government facilitates foreign investors to invest into all fields in Vietnam including infrastructure. Additionally, Vietnam will guarantee SOEs so that they can raise capital from the international market. Vietnam's government is planning to issue government bonds. As scheduled, capital raised from abroad will account for 40% of the country's total investment capital and capital raised from inside the country will make up 60%.
Investors from Geneva (Switzerland): Could you please let us know more about economic reform measures in the upcoming time? Among those measures, which measure is designed to promote liquidity in the stock market?

We have designed a comprehensive demand stimulating package with total amount of some US$8 billion. The amount of money that Vietnam's government set aside for reduction, exemption, extension of tax for businesses and residents totals up to some US$1 billion. Vietnam is also cutting interest rates in medium-term in a bid to help businesses expand operation, maintain investment. The current demand stimulating package is having positive impacts and is believed to generate good effects on Vietnam's economy. We believe that our economic growth in the second quarter will be higher than that in the first quarter.

Given the stock market, Vietnam has increased the foreign ownership ratio to 49%, which should have been high and we have not yet planned to further push it up.

Speaking to Tuoi Tre newspaper, Thomas R. Siebert, chair of AmCham in HCM City, said that "the prime minister's answers conform to Vietnam's realistic situation and investors put high belief in Vietnam's growth prospects. Being an investor in Vietnam, we believe in your country's long-term future."